Building-an-HBCU-Endowment

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					BUILDING HBCU ENDOWMENTS

    Funding the Future
        March 20, 2011


                                  Presented by:
                              Arthur G. Affleck, JD
                         Vice Chancellor for Institutional
                                  Advancement
                           Fayetteville State University
Giving in Partnership




   The tragedy in life doesn t lie in not
 reaching your goal. The tragedy lies in
        having no goal to reach.

            Dr. Benjamin E. Mayes




                                            2
        Giving in Partnership



Today s topics: -


* Understanding Endowment (What s in it for me?)


* Assessing your readiness for endowment (Bring it on!)

* Volunteer and Staff Leadership (We have to do what?!?)


* Building Endowment (Campaigns, Investments– THE BIG IDEA(S)

• Identifying, Cultivating & Soliciting Endowment Prospects (The Opportunity of a
 Lifetime)

* Stewardship (Keeping the money)

                                                                                    3
Understanding Endowment (What s in it for me?)




                                                 4
 Understanding Endowment Campaigns
         (What s in it for me?)

 Endowment is unique from any other fund raising: -

* Total raised will consist of a number of large gifts

* Securing a gift will take longer than any other kind of gift

* Endowment givers are more sophisticated in their giving

* Personal contact is more important than any other time

* Prospects ask tough questions

* Prospects want proof that the gift is a good investment

* Prospects want proof that their gift will make a difference

* Prospects want to know the entire endowment plan


                                      Source: Building Your Endowment by Edward C. Schumacher
                                                                                                5
   Understanding Endowment Campaigns
           (What s in it for me?)




BOTTOM LINE…

Endowment donors think big and ask tough questions.
     Your institution must have the answers.




                                                      6
  Understanding Endowment Campaigns
          (What s in it for me?)




BOTTOM LINE…


  Endowment means you can offer your programs
    with confidence, in perpetuity = Immortality




                                                   7
         Understanding Endowment (What s in it for me?)


 Nine reasons why people give to endowment….

1. They believe in the cause and they were asked
2. They believe in the cause and are involved with it.

3. They believe in the person who asks

4. They like the idea of giving beyond their life

5. They are passionate about the program or charity the fund will support.

6. Their business or industry will gain from the gift.

7. They like the idea that the gift will grow with sound management

8. They are impressed with the financial management of the funds

9. They have a history of giving to endowment and understand the benefits

                                               Source: Building Your Endowment by Edward C. Schumacher
                                                                                                         8
       Understanding Endowment (What s in it for me?)

Types of Endowment

1. Unrestricted Endowment

2. Quasi-Endowment

3. Restricted Endowment

           a.    Program Endowment
           b.    Named Memorial Endowment
           c.    Scholarship Endowment
           d.    Endowment for Faculty or Staff Chair
           e.    Facilities
           f.    Staff Development




                                                        9
        Assessing your readiness for endowment (Bring it on!)

You have to ask yourself…..

Form an advisory committee to answer the following questions:-

  • The Board is committed to building the endowment
       • Does the Board participate in the Annual Appeal?
       • What was the Board s participation in the last Capital Campaign?
       • Have any Board members made a gift to the endowment?
       • Can we effectively address the Board s concerns about endowment?
       • Are there individuals capable of leading the charge?
       • Will staff members have access to the Board?
  • We have the staff commitment
       • Who will oversee the fund raising effort? What other responsibilities
        does this person have?
       • Will this person have administrative support?
       • Who will conduct research on the prospects for endowment gifts?
       • Have we allocated sufficient resources for training and cultivating donors?


                                           Source: Building Your Endowment by Edward C. Schumacher
                                                                                                     10
     Assessing your readiness for endowment (Bring it on!)



• The institution is strong with a clear mission and is considered worthy
 of philanthropic support.

* The institution has a compelling case for future support.


* A solid fundraising program is in place

* Substantial gifts inspire generous contributions from others

* A sound marketing and communications plan is in place


* Sound endowment policies have been formally adopted by the Board.



                                            Source: Building Your Endowment by Edward C. Schumacher
                                                                                                      11
       Assessing your readiness for endowment (Bring it on!)

The Case for Support: -

* Must represent a consensus and a commitment of the Board

* It must motivate philanthropic investment

• It must represent the viewpoint of the constituents not the institutional
   perspective

* It must discuss service and not just the institution s needs

• It must demonstrate how the institution will strengthen the
 the community and address the problem(s) it seeks to solve

* It must portray the institution as strong and sustainable

* Everyone must speak from the same viewpoint

                                                                              12
         Assessing your readiness for endowment (Bring it on!)

Building Your Case for Support

1. What is the value of your institution to the community, state and region?

2. What are the values your institution stands for?

3. Describe the impact of endowment income on your institution's services.
        a) Qualitative – Will something be better?
        b) Quantitative – Will more of something be done?

4. Identify three (or more) benefits of endowment to your institution

5. How will endowment income support, expand, or help your mission?

6. Keep in mind that your institution does not have needs. People have needs!
   Your case should indicate that your institution has the answer, the solution to
   problems and challenges faced by the community/state/region/nation.


                                                                               13
    Assessing your readiness for endowment (Bring it on!)

Bottom Line…..

The Case content has 3 requirements


* An argument that holds water


* A prospectus for investment that will stir the emotions


* An assurance that we can and will do what we say




                                                            14
        Assessing your readiness for endowment (Bring it on!)

The Feasibility Study – Can we make the elephant dance?


• To test interviewees knowledge of the institution

• To secure interviewees advice, concerns and direction related to the
  programs, practices and vision of your charity.

• To test interest in and understanding of the proposed campaign purposes.
• To test philanthropic priorities of those interviewed.

• To test the levels of financial support and volunteer participation of
  those interviewed.

• To assess the possibility of financial support through annual giving
  and estate gifts.


                                                                           15
      Assessing your readiness for endowment (Bring it on!)


Types of Studies


 1. Traditional Feasibility Study



 2. In-House Study



 3. Focus-Group Study



 4. Combination Study




                                                        16
          Volunteer and Staff Leadership (We have to do what?!?)


  KEY COMMITTEES


                                   Governing Board



                          Endowment Advisory Committee


Campaign Endowment Steering Committee Endowment Investment Committee

  • Determine Fund Raising Goals                Oversee the management, investment,
  • Accept/adopt the Case for Support           distribution and growth of the funds.
  • Working with the Advancement Team,
    Develop & Implement the Fund Raising Plan




                                                                                        17
        Volunteer and Staff Leadership (We have to do what?!?)


Defining Roles and Responsibilities


* Keep it simple
                                                    Board                      Staff
* Define accountability
                                                    • Prospecting              • Prospecting
                                                    • Education                • Education
                                                    • Cultivation              • Cultivation
* Recognize the chain of command
                                                    • Giving                   • Giving
                                                    • Asking                   • Asking
                                                    • Thanking                 • Thanking
* Define closure                                                               • Managing
                                                                               • Planning
                                                                               • Training

* Define the relationship with the staff


                                           Source: Building Your Endowment by Edward C. Schumacher
                                                                                                     18
        President s/Chancellor s Role in Fundraising

- President/Chancellor is fundraiser in chief!
- A former Harvard President was quoted as saying that his
job was to raise $1 million dollars a day.
- The UVA President, said 70% of his job was fundraising.
- One CASE Survey indicated 40% was an average. What
should the average be for HBCU s?
- President/Chancellor s that I have worked with have made
time on their schedules for fundraising, but I have had to
push for it.
- Does your President/Chancellor have a dollar amount that
he/she see s as his/her monthly, quarterly or annual
fundraising goal?
                                                             19
          Volunteer and Staff Leadership (We have to do what?!?)


Keeping Volunteers Engaged
A Long and Happy Marriage

* Don t have more meetings than necessary

* Meetings shouldn t exceed 90 minutes

• Create tasks that are time-limited and clearly
  defined

* Honor effort as well as results
* Respect everyone s talents and limitations

* Recognize volunteers                             T. Boone Pickens pledged
                                                       $100 mil. to OSU
* Invest in volunteer training



                                                                              20
                   Largest Gifts to HBCU s
- In 1988, Bill Cosby and his wife, Camille, donated $20 million to Spelman College in Atlanta.
The gift is the largest single contribution ever made to a black college.
- On September 21, 2004, Richard F. Hazel, a retired bottling company executive who never
attended college, donated $3 million to the University of Maryland, Eastern Shore, the largest gift
to any of the state's historically black colleges.
- A number of our institutions have received gifts of $1 million or more from a select group of
corporations and foundations.
- Saint Paul s College recently received the largest donation in the school s history from the
estate of a St. Paul's alumnus. The $1.4 million endowment will be used to create a scholarship
fund.
- Lemoyne Owen accepted $487,500 from the estate of an alum upon the sale of her San
Francisco home.
- What if you received one of these gifts each year. How about 10 estate gifts valued at $100k?



Question: The largest gift to an HBCU happened over 30 years ago! Why?


                                                                                                  21
Building Endowment (Campaigns, Investments)




                                              22
                What s the Big Idea?
Actually, we need to ask, what
are the big ideas for your
endowment campaign?
 • UVA s $20 million donor
 • Dr. William Harvey, Pres. of
   Hampton University: Proton
   Therapy Institute ($225
   million center)
 • FSU – Center for Defense
   and Homeland Security
 • Dr. Walter M. Kimbrough,
   President, Philander Smith
   – Focused on Social Justice

                                       23
          Building Endowment (Campaigns, Investments)

Types of Fund Raising Approaches

  The Major Gift Approach: -
  • institution has a history of major gift fund raising.
  • Staff member (rather than Executive or volunteer) has responsibility for endowment
   fundraising.
  • Staff member has significant major gift fundraising experience.
  • Staff member has sufficient time for one-on-one solicitation and Major gifts management.
   (about 15 hours per week)
  • Endowment steering committee members are experienced in major gift solicitation.

  Planned Giving Approach: -

  • Institution has a planned giving program in place.
  • Institution has received at least five planned gifts in the past three years
  • The VP or Development Director is responsible for endowment fund raising
  • Members of the Steering Committee and/or the Board have made planned gifts or are
   considering them.
  * The institution has limited or small resources.
                                                 Source: Building Your Endowment by Edward C. Schumacher
                                                                                                           24
          Building Endowment (Campaigns, Investments)


The Capital Campaign Approach:-


• The institution has experience running a capital campaign or other campaigns.

• The previous campaigns were successful

• You need to raise a significant amount for your endowment quickly.

• Only a campaign will provide the visibility needed to get the endowment off the ground

• Only a campaign will provoke a serious commitment from the board and staff to
 endowment fundraising.

• There is an endowment steering committee willing to act as a campaign steering committee




                                                 Source: Building Your Endowment by Edward C. Schumacher
                                                                                                           25
       Building Endowment (Campaigns, Investments)


The Bottom Line….


 Use the method or combination of methods that work best for your institution
 and remember…..




                    Plans are only good intentions unless
                       they immediately degenerate
                              into hard work.

                                        Peter F. Drucker




                                                                                26
Identifying, Cultivating & Soliciting Endowment Prospects
(The Opportunity of a Lifetime!)


                         Tell me and I ll forget; show me and
                                            I
                           may remember; involve me and
                                  I ll understand.

                                            Chinese Proverb

                          When you learn, teach. When you
                                    get, give.

                                           Dr. Maya Angelou

                          To ask is no sin and to be refused
                                   is no calamity.

                                          Russian Proverb



                                                                27
        Identifying, Cultivating & Soliciting Endowment Prospects
        (The Opportunity of a Lifetime!)

Identifying Prospective Donors – Start Close to Home….

• Current and former board members
• Current and former committee members and other volunteers
• Current and former contributors
• Current and former clients, patrons, alumni, members etc.
Look For…

• A long history of giving to your institution
• Age 50 or older
• Have a close link to the institution
• Have given to another institution's endowment
• Have no heirs
• Are retired
• Currently give to your institution.



                                                                28
       Identifying, Cultivating & Soliciting Endowment Prospects
       (The Opportunity of a Lifetime!)

A Few Cultivation and Solicitation Recommendations:-


    * Always keep confidentiality as utmost importance

    * Be prepared to change strategies: Naming Opp. vs. Scholarships

    * Use terms such as permanent, legacy, perpetuity and forever

    * Seek advice from Trust Officers and Legal Counsel when needed

    * Involve the whole family


    * Accept rejection gracefully




                                               Source: Endowment Building by Diana S. Newman
                                                                                               29
Identifying, Cultivating & Soliciting Endowment Prospects
(The Opportunity of a Lifetime!)



     You won t get milk from a cow
      by sending a letter. And you
    won t get milk by calling on the
    phone. The only way to get milk
     from a cow is to sit by its side
             and milk it.

    Si Seymour



                               Source: Endowment Building by Diana S. Newman
                                                                               30
        Identifying, Cultivating & Soliciting Endowment Prospects
        (The Opportunity of a Lifetime!)

10 Biggest Mistakes in Endowment Solicitations

  1. Asking too early, under asking, not asking

  2. Asking for the wrong program

  3. Asking by the wrong person

  4. Not listening to the prospect

  5. Surprising the prospect

  6. Failing to follow up promptly or as requested

  7. Failing to show respect

  8. Assuming too much about the prospect's interests

  9. Inadequate preparation

  10. Failing to sell a dream
                                                  Source: Endowment Building by Diana S. Newman
                                                                                                  31
Stewardship (Keeping the Money)




                 Endowment donors have shown
                 the ultimate level of confidence.

                 They are investing in the future of
                 your institution. They are trusting
                 your ability to deliver on your promises.

                 Preserve their trust with your
                 accountability.




                                                             32
         Stewardship (Keeping the Money)

Communicate Regularly and Be Inclusive

      * The Newsletter

      * The Annual Report

      * Private Letter

      * Final Campaign Report

      * Personal Phone Call


      * Donor Clubs


      * Inclusion on the Endowment Committee of the Board



                                                            33
     Stewardship (Keeping the Money)


Bottom Line…



     Saying thank you – even in the most simple ways – is often
 the most profound opportunity an institution has to communicate with
  people who have freely chosen to share in its philanthropic mission.

                Daniel Conway – Achieving Excellence in Fundraising




                                                                         34
          Resources


Endowment Building by Diana S. Newman (Available on www.amazon.com)


Building You Endowment by Edward C. Schumacher (www.amazon.com)
(This book is an easy read and has useful worksheets to help
plan and endowment campaign)


Association of Fund Raising Professionals (AFP)

Council for the Advancement and Support of Education (CASE)




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                               Questions
                                    and/or
                               Comments

Arthur G. Affleck, JD, VCIA Fayetteville State University
   aaffleck@uncfsu.edu
   (910) 672-1339



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